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Why Trump May Actually Boost ESG Investing

Trump’s flurry of proposals to roll back environmental regulations and reject climate change science may seem like a death toll for sustainable investors, but it might have an opposite, galvanizing effect.

As Barron’s writes, “The political backdrop could actually be good for so-called ESG funds, which include environmental, social, and governance criteria in their stock-picking. Trump’s actions could not only accelerate investors’ move into these funds, but push fund managers to step up their own activism.”

According to US SIF, nearly one-fifth of all US assets under management are geared toward ESG. EPFR Global notes that in the 12 weeks since the election, investors have put $383 million into ESG stock funds. Trump’s moves could actually motivate investors and fund managers to seek additional ways to support sustainable investing practices.

“All this could lead investors to pressure companies to address the issues themselves,” says Lisa Woll, head of US SIF. In any case, responsible investors should see this as an opportunity, rather than a setback.